Vesser and Nash - [2008] FMCAfam 1356

FEDERAL MAGISTRATES COURT OF AUSTRALIA

VESSER & NASH

[2008] FMCAfam 1356

FAMILY LAW – Property orders – meaning of 20% of superannuation.

Applicant:

MS VESSER

Respondent:

MR NASH

File Number:

DGC 1623 of 2008

Judgment of:

Phipps FM

Hearing date:

23 June 2008

Date of Last Submission:

23 June 2008

Delivered at:

Dandenong

Delivered on:

17 December 2008

REPRESENTATION

Solicitors for the Applicant:

Jimmy Lardner & Associates

The Respondent appearing in person:

ORDERS

The Court declares that the proper interpretation of paragraph 1 of the order made in the Family Court of Australia on 28 February 2001 between the husband and the wife is that upon the husband’s resignation from [omitted] he became liable within 14 days to pay to the wife a lump sum being 20% of both his total immediate and total preserved benefit with ESS Superannuation.
That the husband pay the wife the sum of $21,435.54.
That the husband pay the wife’s costs fixed at $2,705.00.

IT IS NOTED that publication of this judgment under the pseudonym Vesser & Nash is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
DANDENONG

DGC 1623 of 2008

MS VESSER

Applicant

And

MR NASH

Respondent

REASONS FOR JUDGMENT

Ms Vesser and Mr Nash entered into consent property orders made by the Family Court of Australia on 8 February 2001. They disagree on the interpretation of part of those orders.
The whole order that is relevant. It reads.
1.        That within 14 days of the happening of the first of the following (called ‘the event’):
(a) the husband rolling over his ESS Superannuation;
(b) the husband becoming entitled to his ESS Superannuation;
(c) the husband retiring from or resigning from or being discharged from [omitted];
(d) the death of the husband.
The Husband shall forthwith cause to be paid to the Wife a lump sum, being 20% of his entitlement to his superannuation with ESS Superannuation.
2.        That within 30 days of approval of these Orders by this Honourable Court the Husband forward a sealed copy of these orders to ESS Superannuation irrevocably authorise the trustee in writing to make the payment to the wife upon the occurrence of the event.
3.    Each party otherwise retain their Superannuation.
4.    The wife acknowledges that: -
(a) That she has no interest in the Husbands property at Property F called the real property;
(b) That the Husband shall indemnify the Wife in respect of the Mortgage, rates, water rates and all outgoings on the said real property;
(c) Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of the such party as at the date of these orders (the furniture, personal possessions, and like chattels in the real property being deemed to have been divided by agreement between the parties);
(d) That money standing to the credit of the parties in any bank account is to become the property of the person named therein.
NOTATION: -
That the parties intend these orders as far as practicable, finally to determine the financial relationship between them and avoid further proceedings between them.
When the orders were made the husband was employed with [omitted]. His resigned on 14 June 2007.
By letter dated 14 November 2007 Emergency Services & State Super advised Mr Nash that they had finalized his Defined Benefit Scheme Entitlement at his date of resignation, 14 June 2007. The entitlement was:
Total Immediate:    $127,059.29
Total Preserved:   $125,054.06
Total Benefit:        $252,439.35
On 17 August 2007 the fund had sent Mr Nash $105,227.47 representing the non-preserved portion. This was the amount of $127,059.29 less tax.
On 21 December 2007 Mr Nash transferred the sum of $21,045.49 to Ms Vesser’s account being 20% of the $105,227.47 he received on

14 November 2007
.
Ms Vesser says she is entitled to 20% of the total benefit of $252,439.35. Mr Nash says that she has been paid all of her entitlement, and that is 20% of the immediate benefit only.
The issue is the proper interpretation of the agreement which is embodied in the consent order. I do not consider it assists to interpret the order on the basis of what a court might have done if it had been making the order in a contested matter. It does not assist to speculate that the court might have ordered payment only out of funds after actual receipt by Mr Nash. The parties compromised the dispute.

Ms Vesser gave up any claim to Mr Nash’s property at Frankston.

In return she obtained agreement that she would receive 20% of

Mr Nash's superannuation entitlement upon the happening of any of the four events in paragraph 1. If the proper interpretation is that Mr Nash agreed to pay a percentage of money that he had not actually received, then that is part of the compromise.
The event which has given rise to the entitlement is Mr Nash’s resignation from [omitted]. Paragraph 1 contemplates only one payment to be made within 14 days of the happening of the event. The phrase used is "20% of his entitlement". Mr Nash’s argument is that it is 20% of what he has been paid, that, in effect, the preserved amount is not an entitlement.
The proper interpretation of paragraph 1 cannot be that payment to

Ms Vesser was only due when Mr Nash received an actual payment or became entitled to receive an actual payment. One of the events triggering Ms Vesser’s entitlement was the husband rolling over his ESS Superannuation. He would not then have an immediate entitlement to payment, but would be obliged within 14 days to pay

Ms Vesser 20% of his entitlement at that point.
The nature of the "20% of his entitlement" cannot change depending on which event has occurred. Consequently, if the entitlement includes non-immediate entitlement upon one event it must include it upon all events.
Paragraph 2 of the consent order might suggest a different interpretation. It requires Mr Nash to authorise the trustee to make the payment to the wife upon occurrence of the event. The trustee could not make the payment unless the benefit was payable immediately.
Paragraph 2 cannot change the plain meaning of paragraph 1. Paragraph 2 is an ancillary or administrative provision providing a means of payment. It does not set out the obligation on Mr Nash to make the payment.
Consequently, upon Mr Nash resigning from [omitted] Ms Vesser became entitled to 20% of $252,439.35.
Ms Vesser acknowledges that she is entitled to 20% of the after-tax amount, as she has already received in relation to the immediate payment to Mr Nash. Neither party was able to assist in saying whether there was any taxation liability attached to the preserved amount, and if there was, how much or what percentage it was. The best I can do is assume a tax liability of the same percentage which is attached to the immediate payment. That is 17.1%. This means that Mr Nash is liable to pay to Ms Vesser the sum of $21,435.54.
The application seeks an enforcement order by way of an order for a Registrar to sign documents as may be necessary to implement the orders. There are no documents to be signed. The appropriate remedy is a declaration and an order for payment.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Phipps FM

Associate: Jan Smith

Date: 11 December 2008